BancRobertson Stephens was the first of the technology investment banks
to recognize the vast potential of the Israeli technology laden,
entrepreneurial led business community. Between 1992-1995 it led
three transactions involving EFI, NetManage and Tower Semiconductor.
Initially the activity was launched as a corporate effort with
Evergreen in June 1995 and as a result of rapid growth, expanded into a
fully integrated office in 1997. Since 1996, it has completed 30
transactions valued at more than $2.0 bln. The American investment
banker's Israeli presence is in a partnership with Israel's Evergreen
Group which has $600 mln under management has created an opportunity
for Israeli entrepreneurs to tap the vast American financial market for
capital and to provide the Israeli Venture Banking community with an
exit as they cash out from their early stage investments. Among the
well known Israeli companies who have benefited from Robertson Stephens
prowess in selling an issuer's shares are Amdocs, BackWeb, CheckPoint,
Aladdin, Formula Systems, ForSoft, Fundtech, Galileo, Oshap, Paradigm
Geophysical, Tecnomatix and ADC Teledata.
Michael G. McCaffery, a Rhodes Scholar with an MBA in Business from
Stanford University has 22 years of investment banking experience and
for the past six years served as Robertson Stephen's CEO At the
recently held Fifth Annual Robertson Stephens Evergreen Ltd. Growth &
Technology Conference in Tel-Aviv. Mr. McCaffery described to me
Robertson Stephen' relationship with the Israeli entrepreneurial
company as mostly positive "even if there are frustrations". Among the
comments he made, however, was harsh criticism of the Israeli
entrepreneur. "Israeli entrepreneurs are overly prone to rushing into
the market (public market) too early. Too much emphasis is placed on
pricing the issues with an insistence on overpricing even when advised
to the contrary", states Mr. Mc Caffery.
At the Conference it was pointed out that several years of earnings
experience on the part of prospective issuers prior to a public
financing would be constructive prerequisite for Israeli entrepreneurs.
The investment public's penchant for internet and information
technology issues is once again at a high pitch. The leading 25 new
issues floated on Nasdaq in 1999 were described, by one of the
presenters at the Conference as providing investors with returns of
more than 800%. How ever, a closer look at the price performance of the
internet shares following the price exuberance on the first day of
trading, showed these issues yielding only 11%. As a group they
trailed considerably behind the Nasdaq overall yield of more than 25%.
As to Europe's rush into high-tech public issues and the recent
appearance of a few companies on EASDAQ, Nouveau Marche and the
Frankfurt markets.
Mr. McCaffery while not elaborating, stated "that this clearly places a
discount on the pricing of the shares of those companies".
An investment banking firm, when acting as an underwriter or agent,
serves as an intermediary between an issuer of securities and the
investment public. Where a client relationship exists, the investment
banker's role begins with pre-underwriting counseling and continues
after the distribution of securities is completed, in the form of
ongoing expert advice and guidance. The direct underwriting
responsibilities include the preparing of the registration statement
with the appropriate authorities, consultation on pricing of the
securities, forming and managing a syndicate, establishing a selling
group, if so required, and pegging or stabilizing the price of the
issue during the offering and distribution period.